Yesterday's tech, today's crime —

Europe fines TV, monitor makers $1.92 billion for pricing conspiracy

To Philips' CEO, this biggest cartel fine ever is "unjustified."

Cathode-ray tubes are on their way to becoming historical in technology terms, but to European antitrust regulators, they're very "now."

Seven companies were fined a total of €1.47 billion, or $1.92 billion, for acting as cartels in TV and computer monitor tubes. The fined companies include LG Electronics, Philips, and Samsung, which were found to have fixed prices in both computer and TV monitor tubes. Panasonic, Toshiba, Panasonic subsidiary MTPD, and Technicolor (formerly Thomson) were found to have fixed prices only in the television space, according to a report in the Wall Street Journal on Wednesday.

The companies are said to have set prices artificially, shared markets, and restricted their outputs, all to the detriment of consumers. The cartels date from the late 1990s. Today, CRT technology has mostly been falling by the wayside in favor of newer technologies that power flatscreen monitors and TVs, like LCD and plasma. But even as the CRT market declined and flatscreens took over, these firms controlled production in order to keep prices high, EU regulators told the AP today.

"These cartels for cathode ray tubes are 'textbook cartels': They feature all the worst kinds of anticompetitive behavior that are strictly forbidden to companies doing business in Europe," said Joaquin Almunia, the European Union's antitrust chief. "It is the biggest fine for a cartel, ever." The previous record was a 2008 fine of €1.38 billion ($1.8 billion) for a car glass cartel.

Philips CEO Fran van Houten said the fine was "disproportionate and unjustified," noting that Philips divested the relevant business in 2001. "We regret any association with this type of behavior."

One CRT maker getting off without a fine is Chunghwa Picture Tubes of Taiwan. That company blew the whistle and alerted EU regulators to the existence of the cartel.

And my gas prices are not artificially high?? And OPEC does not set limits on oil production?I am glad that we took care of this ruthless TV cartel and auto glass cartel...

If they could do something about it, they would. If some magical oil replacement comes along everybody will be lining up to come down on OPEC like a ton of bricks, but until then pissing them off could easily mean economic ruin for any particular country.

Was there a trial associated along with this or did the EU decide to just fine them?

According to one of the linked articles it was a ruling.

Quote:

The EU's Commission ruled that, for a decade ending in 2006, the companies -- including Philips, LG Electronics and Panasonic -- artificially set prices, shared markets and restricted their output at the expense of millions of consumers.

While I'm all for busting corporations for price fixing, it seems by my reading that this all came to light 16 or so years ago. They're just now getting down to a ruling? Bureaucracy in action.

And my gas prices are not artificially high?? And OPEC does not set limits on oil production?I am glad that we took care of this ruthless TV cartel and auto glass cartel...

The EU cannot do anything to the oil cartels, if they pushed back the EU collapses instantly.

The OPEC oil cartel are basically the governments of the major oil exporters. They get to make their own laws. In addition, there is no secret conspiracy in OPEC, they are quite open about the fact they are a cartel that tries to control supply in order to maintain what they consider the appropriate price for oil.

The CRT makers violated the law, got caught, and now they have to pay. Most of the same companies are embroiled in lawsuits and anti-trust actions for doing the exact same thing with LCD's. Maybe if the fine is big enough they will learn their lesson. I personally think that until corporate executives start getting serious jail time or perhaps if states amend their laws to make it easier to seize the personal ill-gotten gains of corporate managers, there would not be as much incentive to break the law.

It's nice to know Chunghwa Picture Tubes of Taiwan has more business ethics than LG Electronics, Philips, Samsung, Panasonic, Toshiba, Panasonic subsidiary MTPD, and Technicolor. Horray America, Japan and S. Korea. Or maybe they were the kid not allowed to play with the big kids and told the teacher?

Was there a trial associated along with this or did the EU decide to just fine them?

There has not been a trial yet. The EU Commission has imposed this fine. The EU power structure does not map very well to that of the US, but this is roughly the executive branch imposing a fine. If any or all of the companies involved do not accept the ruling, they can go to court, and if they don't like what the court says, they can appeal, leaving the ultimate decision in the hands of the judicial branch. Sort of like a very big speeding ticket.

I did not say they were companies. Although my plural use of cartel may have hinted at it. Fact still stands, if the EU decided to try to shit on OPEC, OPEC could just cut them off from fuel for a while and their economy would collapse. I am unsure if Russia could provide enough fuel for the rest of Europe, fairly sure they would gladly try though!I do know that the US exports more gas than it imports, so we might be able to help a little bit as well, but we still get a great deal of our crude from OPEC.

Was there a trial associated along with this or did the EU decide to just fine them?

There has not been a trial yet. The EU Commission has imposed this fine. The EU power structure does not map very well to that of the US, but this is roughly the executive branch imposing a fine. If any or all of the companies involved do not accept the ruling, they can go to court, and if they don't like what the court says, they can appeal, leaving the ultimate decision in the hands of the judicial branch. Sort of like a very big speeding ticket.

All this is well and good, but it comes late, very, very late. All the executives responsible for these decisions have long since left the accused companies and of course, none of them will ever be personally exposed to any kind of charges.

Meanwhile, similar practices will continue because, let’s be honest, as big as the fine is it is probably still small for a worldwide price fixing that went on for a decade in a high growth market (TV in the 90s).

It's nice to know Chunghwa Picture Tubes of Taiwan has more business ethics than LG Electronics, Philips, Samsung, Panasonic, Toshiba, Panasonic subsidiary MTPD, and Technicolor. Horray America, Japan and S. Korea. Or maybe they were the kid not allowed to play with the big kids and told the teacher?

No, they're worse.They joined the cartel, profited from it and now they blow the whistle because they know they're safe as the first whistle blower. They're actually traitors.Having said that: the reason that the first whistle blower is not punished is to discourage companies from forming a cartel in the first place. You never know who's going to stab you in the back.

It's nice to know Chunghwa Picture Tubes of Taiwan has more business ethics than LG Electronics, Philips, Samsung, Panasonic, Toshiba, Panasonic subsidiary MTPD, and Technicolor. Horray America, Japan and S. Korea. Or maybe they were the kid not allowed to play with the big kids and told the teacher?

Perhaps, yes... until one day that you'd become that "not big" kid... and you'd feel those big kids were unfair to you...It's nice, isn't it? I guess I'd enjoy that "your" moment... LOL

Is it absorbed into an unspecified EU funding budget, or does it get reimbursed back to the customers who were ripped off by the cartel?(Either end-user consumers, or other companies who purchased tubes from LG, Philips, and Samsung, Panasonic, Toshiba etc)

And my gas prices are not artificially high?? And OPEC does not set limits on oil production?I am glad that we took care of this ruthless TV cartel and auto glass cartel...

OPEC has less control than you think. They had more power once, but they have been continually losing power - they now control only about 40% of global production capacity, and the real problem is, they have no ability to control the prices anymore - they're pumping everything they can because it means economic ruin for -them- if they don't. They have nothing else, and if they suddenly cut off the oil, they would be doomed - the money is the only thing keeping their populations pacified.

I will also note that there is very little they can do about OPEC from a legal standpoint as OPEC is a set of countries, not companies, and countries tend to have immunity from prosecution.

And it is questionable whether OPEC is actually bad for the price of oil or not; the truth is that some members have been working hard to keep the price of oil as low as possible for as long as possible, because of concerns that they won't have made enough money to not be a sucky third world country by the time oil ceases to be useful as a fuel. Its also worth noting that right now, the OPEC countries are actually making less money (relative to inflation) than they made in the early 1980s from their oil sales.

As one Saudi Arabian oil minister said:

"The Stone Age didn't end because we ran out of stones."

Quote:

I did not say they were companies. Although my plural use of cartel may have hinted at it. Fact still stands, if the EU decided to try to shit on OPEC, OPEC could just cut them off from fuel for a while and their economy would collapse. I am unsure if Russia could provide enough fuel for the rest of Europe, fairly sure they would gladly try though!I do know that the US exports more gas than it imports, so we might be able to help a little bit as well, but we still get a great deal of our crude from OPEC.

The problem is that it doesn't really work that way. If OPEC stopped selling oil to the EU, would it hurt the EU? Sure. But it would completely destroy OPEC. What are they going to do, sell rocks?

How long do you think anyone in those countries would remain in power if what little money their countries had went away?

Both need the other, and it is OPEC that needs us more than we need them - if they cut off the oil supply, we do have other options, and if those other options become common enough, why would you ever turn back to oil?

Is this how governments plan on supporting their bloat nowadays? Start fining successful companies to bring in income to prop themselves up? This ought to help create more jobs and bring businesses back into Europe!!!

I think it's how governments hold entities breaking the law responsible for their actions.

Is this how governments plan on supporting their bloat nowadays? Start fining successful companies to bring in income to prop themselves up? This ought to help create more jobs and bring businesses back into Europe!!!

I think it's how governments hold entities breaking the law responsible for their actions.

I can understand how Americans would not understand this fact, as companies in the USA just bribe the officials (either by underhanded means, or by things such as large 'campaign donations') to make sure this kind of thing doesnt happen to them.The USA also seems completely oblivious to obvious cartels such as the MPAA/RIAA. They are just classed as "succesful companies" right?

Was there a trial associated along with this or did the EU decide to just fine them?

Is this how governments plan on supporting their bloat nowadays? Start fining successful companies to bring in income to prop themselves up? This ought to help create more jobs and bring businesses back into Europe!!!

In a way, ensuring a level playing field (since not all makers were part of the cartel, and those that weren't in would have been competing under more adverse conditions) and eliminating market failures (the non-existent invisible hand says price should be the intersection of supply and demand curves, cartels move the price up artificially and prevent competition from driving prices down again) DOES contribute to creating jobs and bringing businesses to Europe. Or do you think companies prefer to work somewhere where they have no guarantees or protection from unfair competition?

Or would you rather see the fines go directly to the people harmed? In that case: who were those people? Someone who overpaid? Someone who decided not to buy due to high prices? And how much would each person get? And what about paying for the (public) service of defending European consumers and businesses from this unfair practice?

Small or no-government is a valid political standpoint, although one I disagree with. But if you do accept that governments should intervene, bear in mind that they have to pay public servants to do that job, either through taxes or through fines or other forms of income. Antitrust cases don't just build themselves.

It's nice to know Chunghwa Picture Tubes of Taiwan has more business ethics than LG Electronics, Philips, Samsung, Panasonic, Toshiba, Panasonic subsidiary MTPD, and Technicolor. Horray America, Japan and S. Korea. Or maybe they were the kid not allowed to play with the big kids and told the teacher?

No, they're worse.They joined the cartel, profited from it and now they blow the whistle because they know they're safe as the first whistle blower. They're actually traitors.Having said that: the reason that the first whistle blower is not punished is to discourage companies from forming a cartel in the first place. You never know who's going to stab you in the back.

how is whistle blowing worse?

it's good. they brought to the attention illegal practices. they are not good guys of course but what they did was correct. LG could have done the same right? a week beforeor samsunng 2 years ago

or phillips 10 years ago.

they didn't so they are wrong. Chungwa did so it is correct.

You are never a traitor when you bring wrongdoings to public attention whether you are a company or a soldier.

Is it absorbed into an unspecified EU funding budget, or does it get reimbursed back to the customers who were ripped off by the cartel?(Either end-user consumers, or other companies who purchased tubes from LG, Philips, and Samsung, Panasonic, Toshiba etc)

All EU antitrust/cartel/monopoly/etc fines are fed into the following years EU budget. Member states' annual payments to the budget are then lowered accordingly.

EDIT: Not sure how big portion the fines are of total revenue. In the budget they are lumped under "Oher revenue" which accounts for about 1% of EU's total income, but that category includes truckloads of small income sources. Can't be arsed to dig the budget that deep.

Is it absorbed into an unspecified EU funding budget, or does it get reimbursed back to the customers who were ripped off by the cartel?(Either end-user consumers, or other companies who purchased tubes from LG, Philips, and Samsung, Panasonic, Toshiba etc)

All EU antitrust/cartel/monopoly/etc fines are fed into the following years EU budget. Member state's annual payments to the budget are then lowered accordingly.

Is it absorbed into an unspecified EU funding budget, or does it get reimbursed back to the customers who were ripped off by the cartel?(Either end-user consumers, or other companies who purchased tubes from LG, Philips, and Samsung, Panasonic, Toshiba etc)

The consumers don't get the money.

The purpose of the fine isn't to "right some wrong" or to reimburse the consumers, the purpose is to hurt the companies involved in the cartel, in a manner that makes it very unattractive to engage in such a behaviour when doing business in the EU. The fines imposed thus looks at the size of the company, as well as seriousness of the infraction. Source.

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Usually threads like this always have the same posters whining about how the EU is out to get American companies. Funny how they're not here when the record fines are amongst others given to a Dutch company.

Dang, the only place I've seen a CRT TV or monitor for sale in years is thrift shops.

Are these things really still available in Europe for new retail?

From the article:

Quote:

The cartels date from the late 1990s. Today, CRT technology has mostly been falling by the wayside in favor of newer technologies that power flatscreen monitors and TVs, like LCD and plasma. But even as the CRT market declined and flatscreens took over, these firms controlled production in order to keep prices high, EU regulators told the AP today. (...) Philips CEO Fran van Houten said the fine was "disproportionate and unjustified," noting that Philips divested the relevant business in 2001.

Was there a trial associated along with this or did the EU decide to just fine them?

Is this how governments plan on supporting their bloat nowadays? Start fining successful companies to bring in income to prop themselves up? This ought to help create more jobs and bring businesses back into Europe!!!

It is better to keep your mouth closed and be thought a fool than to open it and remove all doubt.